LNG

UK major BP and Abu Dhabi National Oil Company have decided not to proceed with a joint offer to take control of NewMed Energy, the Israeli natural gas company with LNG export plans and a supplier of pipeline gas to Israel, Egypt and Jordan.

A statement from NewMed said that the merger process was suspended because of the conflict in Gaza between Israeli military forces and the Hamas terrorist group and would not be proceeding in the near future.

The suspension would remain in force until discussions on an actual transaction resumed or were totally terminated.

“There can be no certainty that discussions will resume or that an agreement will be reached in the future, nor as to the terms of an agreement should one be reached,” explained NewMed.

“The NewMed Partnership will update unitholders of further developments as appropriate,” it added.

Suspension details

NewMed stated that the joint committee looking into the BP-ADNOC deal has agreed “due to the uncertainty created by the external environment” to suspend discussions in relation to the proposed transaction.

BP and ADNOC had previously made a non-binding offer in March 2023 to take NewMed Energy private and out of the Tel Aviv Stock Exchange through an acquisition of the free float listed shares and a partial acquisition of a stake still held by Israel's Delek Group.

The transaction would have resulted in BP and ADNOC holding 50 percent of NewMed Energy.

NewMed, a stakeholder with US major Chevron Corp. in the large Leviathan natural gas field offshore Israel, had previously approved budgets for 2023 including gas field development to provide feed gas for a floating LNG export project.

BP and ADNOC had intended to form a new joint venture that would have focused on “gas development in international areas of mutual interest including the East Mediterranean” region.

The proposed BP-ADNOC transaction followed a move by NewMed Energy itself to merge with Capricorn Energy of the UK but the Israelis later withdrew in February 2023 from that bid.

Main assets

The main NewMed asset, the Leviathan gas field, supplies the Israeli domestic market as well as exporting gas by pipelines to Egypt and Jordan.

The Leviathan project shareholders are the NewMed Partnership with 45.34 percent, Chevron subsidiary, Chevron Mediterranean Ltd with 39.66 percent, and Ratio Energies with 15 percent.

NewMed, which announced its name change from Delek Drilling to NewMed Energy in February 2022, also has a stake in the Aphrodite gas field in the offshore economic zone of Cyprus, making it one of the biggest players in the East Med.

Four months after the start of the Gaza conflict BP and ADNOC said in February 2024 that they had formed a joint venture in Egypt that would initially focus on natural gas and would incorporate Egyptian concession stakes held by BP.

That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of the 50 percent stake in Israel’s NewMed.

NewMed Energy, the Israeli natural gas company and LNG project developer in the East Mediterranean, has taken a positive final investment decision for a third natural gas pipeline for production wells in the Leviathan gas field amid LNG export and domestic supply plans.

NewMed Energy, a stakeholder with US major Chevron in the large Leviathan natural gas field offshore Israeli, has approved budgets for 2023 including gas field development to provide feed gas for a floating LNG project.

TotalEnergies Chairman and Chief Executive Patrick Pouyanné has met Lebanese Minister of Energy and Water Walid Fayad at the French major’s Paris headquarters to mobilize drilling teams for the Block 9 offshore resource that will make Lebanon an energy producer in what is becoming the Eastern Mediterranean LNG and pipeline gas hub.

NewMed Energy, formerly Delek Drilling and owner of the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, is continuing with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.

Mubadala Petroleum, the international energy company based in Abu Dhabi in the United Arab Emirates and with natural gas assets in the Eastern Mediterranean and LNG feed-gas resources in Malaysia, has reported a surge in annual production.

Israeli company Delek Drilling, the owner of natural gas resources in the East Mediterranean, is changing its name to NewMed Energy as it expands the Leviathan gas field, increases its exposure to the LNG market and pursues exploration licences in Morocco.

Chief Executive of former Delek Drilling and now of NewMed, Yossi Abu, said that the success in production from Leviathan in the past two years, and especially the successful realization of the regional exports, had in effect turned NewMed Energy into a leading energy entity of regional importance. 

“Analyses showing the demand for natural gas (both regional and domestic) is rising constantly and justifies the expansion of production from the Leviathan field, in accordance with the approved development plans for 21 billion cubic metres annually,” said Abu.

“The second phase of Leviathan will concentrate on expansion of the infrastructures for the transmission of natural gas from the reservoir to additional consumers in its export markets along with exposure to global LNG,” stated the NewMed Energy CEO.

The company said it was also in an advanced process for the receipt of exploration licenses in Morocco as a leading partnership in its field with considerable professional knowledge and a proven track record in regional activity.

Morocco plans

“NewMed Energy has identified Morocco as a country with tremendous potential in both geological and commercial terms,” said the company.

“The board has authorized NewMed Energy's management to act, and it is currently in advanced negotiations for receiving exploration licenses in offshore Morocco, in both the Mediterranean and the North Atlantic Ocean,” stated NewMed Energy.

NewMed Energy CEO Abu said the launch of the new brand name was part of a strategic process.

“With Delek Drilling's well-known DNA, NewMed Energy will be an innovative and leading energy entity that will maximize the value of the existing core assets and promote significant processes such as the expansion of Leviathan and the development of the Aphrodite (Cyprus) reservoir, alongside the launch of exploration and production of natural gas in other countries in the Middle East,” stated the CEO.

“Exactly as Delek Drilling was, NewMed Energy will continue to be a key energy anchor in the region, with the aim of giving our investors both a stable dividend yield and growth,” Abu declared.

NewMed Energy stated that the “natural gas revolution in Israel” which continues with the Leviathan field, has led to a reduction of around 70 percent in pollution as a result of gas-fired electricity generation in Israel, and to a significant reduction in greenhouse-gas emissions.

“A reduction in air pollution can also be seen in Egypt and Jordan, countries to which gas from Leviathan is exported,” it added.

Delek Drilling, a partner in the Leviathan natural gas field, said the joint venture was finalizing a set of agreements allowing the supply of pipeline natural gas to Egypt via Jordan, using the Israeli transmission system to Jordan and the system connecting Jordan and Egypt in the area of Aqaba-Taba.

Israeli energy company Delek Drilling has signed the final agreement for the US$1.1-billion sale of its 22 percent stake in Israel’s second-biggest natural gas resource, the Tamar field, to Mubadala Petroleum of the United Arab Emirates.

Delek Group, the Israeli company with natural gas assets in the East Mediterranean contributing to the region’s LNG and pipeline mix with supplies to Egypt and Jordan, returned to a first-quarter profit from a previous loss due to higher Leviathan gas field revenues.